On a wintery Monday evening, the great and the good gathered beneath the stained glass windows of JP Morgan’s imposing great hall for the Platforum Awards hosted by JP Morgan Asset Management, (congratulations again to the winners, listed here).
It’s a good moment to reflect on what has, and what hasn’t changed since the #PlatforumAwards last year.
The biggest development is the set of new awards we felt we had to introduce for Technology, Service and Innovation on Adviser Platforms, Innovation on D2C Platforms and a new Platform Partner Award, voted by DFMs. They reflect the current transformations and trends in the platform market. (And it takes the number of awards from six up to 11.)
The winners of the adviser platform awards remained consistent. One attendee sardonically referred to them as the “Transact-Parmenion awards”. And it is true: Transact and Parmenion cleaned up again this year. Their customers say they provide great service and praise their technology. (You can see videos of a couple of their customers praising their offering here.)
It is interesting to note that both firms use proprietary technology. We estimate that there are nearly £240bn in assets moving from one technology solution to another among retail platforms. But the two winners operate their own, in-house technology.
Will the technology outsourcers work their way back to pole position, once they’ve transitioned their technology? Nucleus’s scores are climbing up our leaderboard, as are those for Aegon and Standard Life. In the coming year, could the technology outsourcers unseat Transact and Parmenion? (Notably, 7IM also scores well – and runs on proprietary tech).
If platforms compete to offer great service, that can only be a good thing for advisers. However, good service does come at a cost – higher platform fees for most customers. We wrote about the customer service-cost conundrum earlier this year. What advisers want is fair charges and great service.
While everyone is talking about fund management fees, we still expect to see more movement on platform fees and we’ll monitor any corresponding impact on service.
Nucleus took home the prize for Best Platform for Innovation. It has cleared the re-platforming hurdle and is now fine-tuning the proposition. Its portfolio reporting tool, Narrate, is an example of innovation that should help advisers deliver a better service to their clients.
On the D2C side, the innovation award went to Interactive Investor. We think that a digital divide is opening up in our industry. Interactive Investor is investing heavily in digital and offers a comprehensive mobile proposition with good trading apps and optimised websites, plus good login procedures and a consistent social media presence.
We think we’ll see more investment in mobile, particularly from the D2C players who quite frankly, should be there already.
The chatter at the annual Platforum Awards included the day’s news that Barclays launched their new D2C platform. The platform is priced at a keen 20bps for funds and even less for other investments (though there are some modest transaction charges). So it looks like a strong proposition and a potential game-changer.
But the proof of the pudding will be in the eating, and Barclays hasn’t always fared well in Which? and Money Saving Expert reviews of banking service. The new Barclays platform will be competing with Hargreaves Lansdown, which has a fantastic service record (and picked up an award for Best D2C Proposition).
One of the biggest frustrations in our industry is that the flow of new money coming into investments is simply not high enough. More people need to be investing for their future. The banks have the potential to convert savers to investors, and we hope that Barclays will make a success of their new platform.
If Barclays brings more people to investing, it will be good for the entire industry. A senior executive who had recently moved from a D2C platform to an advised platform told me: “I got sick of seeing my clients leave us to go advised as soon as they accumulated any wealth”.
2017 is shaping up to be a year of change. We look forward to seeing you all again at next year’s Platforum Awards.